The True Cost of Setting Up a Limited Company in the UK — Fees Explained
Setting up a limited company involves both one-off setup costs and ongoing annual fees. Understanding what you will pay — and when — helps you budget properly from the start and avoid surprise invoices at year end.
One-Off Setup Costs
Companies House registration fee — £100 This is the government fee paid directly to Companies House to incorporate the company digitally. It increased from £50 to £100 on 1 February 2026. It is a fixed statutory fee and applies regardless of who files on your behalf. Same-day digital registration is available for £156.
Accountant's incorporation fee Most accountants charge a one-off fee to handle the registration, advise on share structure, set up the articles of association, and ensure the company is structured correctly from a tax perspective. This typically covers the filing itself and initial tax planning — getting the setup right from day one costs far less than correcting a poorly structured company later.
Registered address If you do not want to use your home address on the public record, a registered address service is advisable. This is usually charged annually and typically includes receipt and forwarding of official correspondence from Companies House and HMRC.
Later One-Off Registrations
These are not needed immediately but will be required as the business grows:
VAT registration — required once taxable turnover exceeds £90,000 in a rolling 12-month period, or can be done voluntarily before that point.
PAYE registration — required before you pay any salary through the company. Even a small director's salary requires a payroll scheme to be set up with HMRC. This can be done at any point after incorporation.
Annual Ongoing Costs
Confirmation statement — £50 Companies House fee + accountant's fee Every company must file a confirmation statement with Companies House once a year confirming the company's details are correct — directors, shareholders, registered address, and share structure. The Companies House digital fee increased to £50 from 1 February 2026 (up from £34). Your accountant typically charges a small fee to prepare and file this.
Annual accounts and corporation tax return At the end of each financial year, the company must file statutory accounts with Companies House and a corporation tax return (CT600) with HMRC. The cost varies depending on the complexity of the business and who handles the bookkeeping throughout the year.
Bookkeeping and VAT filing If VAT-registered, quarterly VAT returns must be filed with HMRC. Bookkeeping is typically handled through accounting software such as Xero, with your accountant reviewing and filing returns. The Xero subscription and bookkeeping fees are quoted separately once the business is up and running.
Payroll If you pay salaries, payroll must be run and reported to HMRC through Real Time Information (RTI) each time a payment is made. Accountants typically charge per payslip. For a single director taking a small salary, the monthly cost is modest.
Personal tax return If you have income outside the company — dividends above the allowance, rental income, or other personal income — you will need to file a self assessment tax return each year.
What to Budget in Year One
| Item | Cost (from Feb 2026) |
|---|---|
| Companies House incorporation fee (digital) | £100 |
| Accountant incorporation fee | £100–£300 + VAT |
| Registered address (year one) | £100–£200 + VAT |
| Annual accounts and CT600 | £500–£1,500 + VAT |
| Confirmation statement | £50 + accountant fee |
| VAT registration (if needed) | £100–£200 + VAT |
| PAYE registration (if needed) | £100–£200 + VAT |
Frequently Asked Questions
Q: Can I register the company myself to save the accountant's fee? A: Yes — Companies House allows direct online registration. However, the accountant's fee typically covers more than just the filing. It includes advice on share structure, articles of association, SIC code selection, and initial tax planning. Errors in the setup — particularly around share classes and ownership — can be costly to correct later.
Q: Are accountant fees tax-deductible for the company? A: Yes. Accountancy fees for maintaining the company's books, filing accounts, and tax compliance are allowable business expenses and reduce the company's corporation tax liability.
Q: When do I need to file my first accounts? A: Your first accounts cover the period from incorporation to your chosen accounting year end. Companies House allows up to 21 months from the date of incorporation for the first accounts filing, but HMRC requires the corporation tax return within 12 months of the accounting period end. Your accountant will set the right year end and manage both deadlines.
Ready to set up your company and understand the full costs? Contact Liberate Accountants for a free consultation, or learn more about our company registration service.
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